Russian commodities firms are reportedly using the top stablecoin USDT to execute financial transactions with Chinese companies.
Bloomberg, citing “top executives at the companies,” reports that at least two metals producers in Russia use the Tether-issued stablecoin and other crypto assets to facilitate cross-border transactions with clients and suppliers in China.
The companies, which are not sanctioned, also reportedly sometimes route settlements through Hong Kong.
China didn’t sanction Russian companies in the wake of Russia’s invasion of Ukraine in 2022, but Chinese lenders have still reportedly tightened their compliance measures due to the possibility of secondary sanctions for working with Russian firms.
USDT is the top stablecoin by market cap and aims to maintain a 1:1 peg to the US dollar.
Ivan Kozlov, the co-founder of the crypto firm Resolv Labs, tells Bloomberg that dollar-pegged stablecoin cross-border transactions are a “relatively common practice” in countries facing dollar liquidity issues and capital controls.
“With stablecoins, the transfer may take just 5-15 seconds and cost a few cents, making such transactions pretty efficient when the sender already has an asset base in stablecoins.”
Some Russian steelmakers are also sometimes eschewing cross-border transactions altogether and sending their products abroad in exchange for goods shipped into Russia, Bloomberg reports.
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